On the graph above, the economy begins in equilibrium at Point E, representing the real interest rate, r1, at which saving, S1, equals desired investment, I1. What will be the new equilibrium combination of real interest rate, saving, and investment if there is a tax law change that makes investment projects more profitable and increases the demand for investment goods (but does not change the amount of taxes collected in the economy)?

A. Point D

B. Point A

C. Point B

D. Point C

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